Economic Implications of Port Call Dislocation in the Port of Boston Hauke Kite-Powell, WHOI Brad Wellock and Deb Hadden, MASSPORT April 2005

Context Ship strike mgt. measures (routing, speed) increase cost of transport –Effects can be more severe for some ports than others Degrees of adjustment: –No (additional) port call dislocation –Occasional port call cancellation –Service change / port call elimination

Objective Estimate the direct and indirect economic effects of potential port call dislocation for the Port of Boston using MARAD’s Port Kit economic impact model (based on I/O model)

MARAD Port Kit Model Estimates direct and indirect economic effects associated with changes in port activity or infrastructure. Direct effects: expenditures of businesses directly associated with the movement of waterborne cargo and passengers through the terminals, including vessels, terminals, cargo and passenger transactions, and inland transport. Indirect effects: expenditures of the port industries buying goods and services from other industries in the region. Induced effects: spending by employees of the port industries and their suppliers.

Port Kit Inputs: Cargo Port services (tugs, pilots, dockage, etc.) Bunkers Loading/discharging Expendable supplies Inland movement Government requirements (customs, taxes, etc.) In-transit storage Cargo packing

Port Kit Inputs: Passengers Port services (tugs, pilots, dockage, etc.) Loading/discharging Supplies and services Inland transportation Bunkers Gov’t requirements (customs, immigration, etc.) Spending per day/night ashore

Input Summary (2003 data) Cruise: –Port of call: 75 calls; 63,197 passengers –Homeport: 43 calls; 137,155 passengers Container: ~100 calls; 155,273 TEU Liquid bulk: 400 tanker, 650 tank barge calls; mt petroleum products (includes LNG) Dry bulk: 150 calls; 4.8 mt Autos: 100 calls; 90,000 vehicles

Port Kit Model Results port calls $ millions/port call outputincomeGSPempl. Cruise – homeport Cruise – port of call Container Liquid bulk Dry bulk Automobiles Port of Boston maritime: $800 million GSP; 15,000 jobs

Scenarios lost port calls $ million/year outputincomeGSPempl. 1. MSC104 container COSCO52 container Norwegian Majesty 27 homeport Royal Caribbean Cruise Lines 12 homeport port-of-call subtotal, RC

Likelihood of Dislocations Historical examples: –Maersk SeaLand 2001 (Halifax-Boston-NY) –VW 2002/03 (Boston to Davisville RI, $35/car) –Volvo 2002 (Jacksonville to Brunswick, $10/car) Likelihood is difficult to estimate –MSC operates with similar tide constraints –Observed cost differentials are higher than direct costs estimated for ship strike management measures